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The Claimant was injured in a road traffic accident on the 10th September 2004. He instructed solicitors under a CFA and took out ATE insurance. Liability was admitted 7 days after the letter of claim. Proceedings were issued in June 2005. A Part 36 offer of £1,800.00 was made on the 16th August 2005. This was not accepted. A Disposal Hearing was fixed for the 13th September 2005 at which the Claimant was awarded damages of £1,774.32. The Claimant was awarded his costs up to the 7th September 2005, being the last date on which the Part 36 payment could have been accepted without the permission of the Court and summarily assessed them at £4,550.92. These were made up of, in part, base costs to which a success fee of 100% was applied. He also ordered the Claimant to pay the Defendant’s costs since September 2005 assessed at £721.68. This action was governed by CPR Part 45 Section iii “fixed percentage increases in road traffic accident claims”. 45.16 allows that where a claim concludes before a Trial has commenced or the dispute has settled before a claim is issued, the success fee should be 12.5% but where the claim concludes at Trial, the success fee is 100%.

The Defendant appealed against the 100% success fee.

The decision

The Court had a wide discretion under Rule 44.3 to make whatever Costs Orders it considered appropriate in the particular circumstances of the case, taking account of the various factors specified in the Rules:-

Ô All the circumstances, including the conduct of the parties;

Ô Whether a party has succeeded on part of its case, even if it has not been wholly successful;

Ô Any payment or admissible offer to settle which is drawn to the attention of the Court and which is not an offer to which costs consequences under Part 36 apply.

The central question was however, whether under Rule 44 the Court could order that the Claimant be awarded a different success fee than that prescribed by Rule 45.16.

The Court had no jurisdiction under Rule 44 to circumvent the mandatory provisions of Rule 45. It cannot do this directly by awarding a different success fee under Rule 44; nor can it do it indirectly by awarding the Claimant a proportion of its costs which is calculated for the avowed purpose of awarding a success fee of 12.5% instead of 100%.

Section III of Part 45 contained a carefully balanced scheme for the award of success fees in road traffic accident cases. The object of the scheme was to provide certainty and avoid litigation over the amount of success fees to be allowed to successful parties. It was inherent in the scheme that in some cases the success fee would be unreasonably high and in others unreasonably low, but that was the price that had to be paid for achieving certainty and avoiding litigation over the amount of success fees.

The appeal would be dismissed therefore, although the Part 36 issue raised was one of some difficulty and there might well be a case for deciding that, where a Claimant failed to better a Part 36 offer or payment, he should be allowed the same success fee that he would have recovered if he had accepted the offer. That however was not the effect of the Rules in the present form and it would be a matter for the Rule Committee in the Civil Justice Council to consider whether to amend Part 45 to make special provision to deal with the Part 36 issue.

focus on...

Contingent loss is relevant to limitation; specifically, the date at which a claimant’s cause of action accrues for the purposes of a claim in the tort of negligence (as many claims against professional advisers are framed).

Companies should undertake a comprehensive review and audit to identify those products and legacy contracts that are LIBOR-linked and carry out an in-depth risk assessment of discontinuation. Where possible, companies should look at appointing an individual to oversee the programme.

The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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